Dec. 5 (BusinessDesk) – The National-led government will legislate within the current parliamentary term to cap core government spending as part of the coalition agreement signed today with the one Member of Parliament for the Act Party, John Banks.

Govt spending cap and charter schools mark ACT coalition deal

Dec. 5 (BusinessDesk) – The National-led government will legislate within the current parliamentary term to cap core government spending as part of the coalition agreement signed today with the one Member of Parliament for the Act Party, John Banks.

The agreement will also see the establishment of a radical new “charter schools” programme, which will allow alternative education providers to compete with existing schools for pupils and funding “where educational underachievement is most entrenched.”

The agreement was announced shortly after a confidence and supply agreement was also unveiled with Peter Dunne, the only MP for the United Future party. Dunne sought various commitments, including continued pursuit of his Income Sharing Bill, and no sale of Kiwibank.

Dunne and Banks represent the government’s majority in Parliament and are essential to Prime Minister John Key’s efforts to form a government after the Nov. 26 election, which the National Party won less convincingly than it had hoped after the New Zealand First party gained eight seats.

Key said an agreement was likely with the Maori Party by the weekend, and would not bind the party as strongly to support the government as the Act and United Future arrangements.

The spending cap legislation will “within the next two years provide that core Crown operating spending … will be subject to a spending limit”, which will allow spending growth “no faster than the annual increase in the rate of population growth multiplied by the rate of inflation.”

The new regime will exclude spending on unemployment benefits, asset impairments and natural disasters.

“We’re confident we can meet that rule,” said Key, who negotiated mostly with outgoing Act MP John Boscawen and the party’s president, Catherine Isaac, rather than Banks.

The charter school proposal will enable parties, under existing clauses of the Education Act, to establish schools that “would compete to operate a local school or start up a new one.”

South Auckland and central/eastern Christchurch would be targeted first for the policy, which could see iwi, private and community organisations seek funding.

“It is designed to provide greater flexibility in governance and management, including the ability to attract top quality teachers, prepare and inspire children to achieve their potential and be accountable for doing so.”

An implementation group will be established, along with a task force to report on governance in state, integrated, and independent schools.

Key confirmed this meant performance-based pay for teachers could be on the table.